The WSJ has a good piece on the beginning of the adoption of smart electricity meters, which is a start to changing our electricity system. Ten years ago, the utilities were pretty much unanimously against these meters, so it’s good to see them starting to install them. It offers a lot of lessons on how we’re going to need to change how we do things and the obstructions encountered in so doing.
The WSJ writes:
To date, 16,000 to 18,000 people have participated in more than five dozen pilot tests involving smart meters and experimental rate plans, according to Ahmad Faruqui, a consultant with the Brattle Group who has helped utilities develop some of the programs. He says that while it is sometimes disheartening to see utility executives ignore their own findings, he understands the desire to move slowly until people become comfortable with smart-meter technology.
That’s a pretty small number, but its a start. The biggest problem of course is the utilities, who having run the system pretty much the same way for almost a century, they don’t see much need to change. The simple agreement has been the utilities provide electricity at a reasonable, and some would say a very cheap rate, and people basically allow the utilities to run things whatever they want. Leading to the second problem, most electricity users pay very little attention to how they use electricity, first and foremost because its so cheap.
Information is always cheaper than energy, getting more information into the system allows things to change. I have always been astounded in dealing with the electricity industry how it is almost universally accepted that more information about how things were run, wouldn’t provide any value. This is still a big problem and as the article points out, the utilities don’t even know what to do with the information they are receiving. Simply giving them more information isn’t going to help, or will not be as helpful as it should be. The electricity system in this country is run by government bestowed monopolies. Political reform needs very much to be utility reform. We need to open the system so that not just the utilities, but others who will know what to do with the information can enact necessary change.
The WSJ writes:
“You could have a real rebellion” if smart meters push up customers’ rates, especially if utilities’ other capital expenses are increasing, he says.
There’s probably few industries which as much fixed capital debt as the utilities, and it seems at times this debt is never ending. It is an important point for the United States. We are an extremely wealthy nation, however much of our fixed capital, particularly in regards to the energy sector, is the problem. We have to change how this operates and the more debt we pile on the existing infrastructure, the more difficult that change is going to be. Unlike the developing world where such infrastructure is limited, adding to it creates wealth. In the United States changing this infrastructure is not creating new wealth, but transferring established wealth to new purposes. It is an extremely important distinction. Power is going to have devolve from the utilities.
Electricity users must educate themselves and be part of the change. Being a citizen in the 21st century means understanding energy.
Cross-posted from Archein: “energy as political reform”
Archein